No more curbs on capital inflows: FM

Finance Minister P Chidambaram on Thursday told global investors that no further measures were in the offing to curb capital inflows, even as he said India would ease procedures for foreign institutional investors (FIIs) to register and do business in the country.

"I would urge Sebi (Securities and Exchange Board of India) to meet potential FIIs to explore ways and means to make registration even simpler," he said at an ICICI Securities global investors' meet in New York.

Chidambaram, who took questions after his speech, was repeatedly asked to clarify the intent behind the market regulator's recent proposal to curb participatory notes (P-notes), an offshore derivative instrument used by overseas investors who buy shares anonymously.

"Foreign investors are liquidating their holdings of securities in their countries and putting that money elsewhere. It has therefore become necessary to take some measures to moderate the flow of funds into India. We have no intention of imposing control on capital flows, nor do we intend to keep out certain kinds of funds," he added.

Chidambaram also attributed the sharp fall in the Sensex today to "motivated rumours". "In the morning session, the market gained 400 points; in the afternoon, there were motivated rumours in the Bombay brokers' circle," he said.

He added that Sebi had reserved the right to extend the 18-month deadline, during which time FIIs can roll over derivate exposures through P-notes.

Chidambaram also made it clear that the rupee was not in the "comfort zone" and India was facing an "entirely new situation" in this regard. The Indian currency has appreciated nearly 12 per cent in this financial year.

Chidambaram attributed the sharp fall in the stock markets today to "motivated rumours". "In the morning session, the market gained 400 points; in the afternoon, there were motivated rumours in the Bombay brokers' circle," he said.